Money

Yuan surges to highest in five years

By Xin Zhiming (China Daily)
Updated: 2010-06-26 09:22

Obama says it's too soon to tell if China's currency policy change will be sufficient

BEIJING - China's yuan surged on Friday to its highest level in the past five years, with the central bank setting the reference central parity rate at 6.7896 against the dollar, already more than half a percentage point higher within a week.

An employee counts US dollars at a Bank of China branch in Kaifeng, Henan province. China’s central bank set the yuan’s central parity rate against the dollar at 6.7896 on Friday. [TIAN SHENG / FOR CHINA DAILY]

However, US President Barack Obama claimed on Thursday it was too soon to tell whether China's latest yuan policy change would be sufficient.

China said on June 19 that it would make the yuan more flexible, which Obama described as a "positive" move. China has made progress with the announcement that it was returning to its phased-in, market-based approach, he said at a joint press conference with Russian President Dmitry Medvedev.

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He said, however, that it was too early to tell whether the approach "is sufficient to allow for the rebalancing that we think is appropriate".

The United States would closely monitor the situation, he added.

"We did not expect a complete 20 percent appreciation overnight, for example," said Obama, because that "would be extremely disruptive to world currency markets and to the Chinese economy".

A stronger Chinese currency would be good for the US, Chinese and world economies, Obama said.